Corporate Tax Services in UAE

No. Corporate Tax is a direct tax on business profits, whereas VAT (5%) is an indirect consumption tax applied to the sale of goods and services. A business may be liable for both, depending on its activities and registration status. Corporate Tax is assessed annually on net taxable income, while VAT is collected quarterly from customers and paid to the FTA. Both are administered by the Federal Tax Authority but operate under separate legal frameworks.

Yes, free zone companies must register and comply with UAE Corporate Tax law. However, many can qualify for a 0% rate on eligible income if they meet conditions such as economic substance, qualifying income criteria, and transfer pricing compliance. Non-qualifying income or failure to meet conditions may be taxed at 9%. HAMG specializes in free zone corporate tax assessments to help clients determine their qualifying status and protect their tax incentives.

All taxable persons must register with the Federal Tax Authority (FTA), including mainland companies, qualifying free zone entities, and resident legal persons. Individuals conducting business activities under a commercial license are also required to register. Failure to register can lead to penalties of AED 10,000 unless transitional relief conditions are met. Registration does not mean tax is payable — even businesses with 0% tax liability must register.

The UAE has a tiered tax rate: 0% on net taxable income up to AED 375,000, 9% on net taxable income above AED 375,000, and 15% applies to large multinational enterprises with global revenues exceeding EUR 750 million under OECD Pillar Two rules (where applicable). Small Business Relief is also available for businesses with revenue below AED 3 million in certain tax periods, allowing them to be treated as having zero taxable income.

The UAE Corporate Tax regime applies to financial years starting on or after 1 June 2023. For businesses with a financial year aligned to the calendar year (January–December), the first Corporate Tax period began on 1 January 2024. Tax returns must be filed within 9 months from the end of the financial year — meaning businesses with a December year-end must file by 30 September. HAMG provides Corporate Tax registration, compliance, and filing services to ensure you meet all FTA deadlines.

Failure to file a Corporate Tax return on time in UAE can result in significant FTA penalties. Administrative penalties for late filing start at AED 500 per month for the first 12 months and increase to AED 1,000 per month thereafter. Additional penalties may apply for inaccurate returns, failure to maintain proper records, or non-payment of tax due. The FTA also conducts risk-based tax audits, which may result in further assessments and penalties. HAMG ensures all Corporate Tax returns are prepared accurately and filed within prescribed deadlines.